The math is inescapable: a business’s profits are bound by both their gross earnings and their expenses. Many factors that affect gross profits are outside a business’s control. However, careful assessment of costs can held identify areas where expenses can be lowered to make a business more profitable. The areas below are ones to examine on a regular basis to see where a business owner might be overspending. Careful attention can cut business costs and increase net profits.

Staffing Costs

Staffing is often the largest business budgeting expense a small business owner will face. Making sure that the people who work in a business are driving its success is imperative. Some businesses find that they can get by with a smaller administrative full-time staff and can, instead, bring in temps a few times a year or outsource many support options.

Other businesses can keep staffing costs from rising by offering non-tangible benefits for performance instead of bonuses or raises. These can include flexible schedules or the ability to telecommute.

One more resource to consider is interns. Certain business tasks that are uncomplicated but that can help future candidates understand how the business is run can be effectively handled by interns. By providing value in the form of education and contacts, a business can create a mutually beneficial arrangement.

Cutting Insurance Costs

Insurance of all kinds tends to increase in cost every year. Business owners should audit their policies at least annually to ensure that the coverage that they have fits both their needs and their budget. Some businesses may find, for instance, that they hold more liability coverage than is needed or that other insurance providers may provide a better price. In other cases, a company that provides health insurance to employees may find that this is less expensive to at least partially self-insure instead of working solely with an external insurance provider.

Sometimes, a change in zip code is the key. Economically depressed areas often offer great properties at a lower price per foot. Other times, a smaller space is the ticket to reduced costs. Businesses that find that they have a lot of dead and unused space can save money by choosing a smaller location.

By assessing each cost and looking for a way to reduce it without hurting operations, businesses can increasingly keep their budget in the black. Careful attention to the tips above and other areas can be the key to cutting business costs and helping net profits soar.

Entrepreneurs:

Every community wants to grow its local economy and achieve greater prosperity. Every community desires to be a location where people want to live, engage in meaningful work, and pursue their passions. In short, every community wants to be a vibrant, safe, and livable place.

A growing body of research has revealed that the traditional economic development emphasis on recruiting or attracting businesses is no longer sufficient to grow economies in most localities. A new model has emerged in theory and practice: supporting local entrepreneurs as an economic development strategy.

Programs such as “economic gardening,” pioneered by the City of Littleton, Colorado; Energizing Entrepreneurship institutes; business retention and expansion programs; and Hometown Competitiveness all focus on helping local entrepreneurs become more successful and bring more wealth into the local economy.

Our definition of an entrepreneur is “someone who perceives an opportunity and creates and grows an organization to pursue it.” In our view, entrepreneurship encompasses not only high-tech enterprises seeking venture capital, but small business owners pursuing their passion to create a manufacturing, retail, or service business, or to start a nonprofit endeavour.

Our mission at Growing Local Economies is to help local communities become more prosperous by leveraging their assets to support local entrepreneurs. We can help you find the best solutions for your community by working with you to identify the local assets, potential partners, and technical resources needed to create and sustain an entrepreneurial support initiative.